GOVERNOR McKINLEY’S FINANCIAL TROUBLES.
One of the sad events in the career of President McKinley was the loss
of his fortune in the year 1893. It was during his first term as
Governor of Ohio, and was a period of humiliation and anguish to the
Governor and his wife, but they met the crisis with that quiet fortitude
that ever characterized them, and found friends in abundance to aid them
in their distress. This money trouble was not brought about by any wild
speculation on the part of the Governor. He had never evinced any desire
to seek riches through such agencies, and so faithfully had he applied
himself to the people’s interests that, notwithstanding his years of
hard work, he was worth not to exceed $20,000, which was invested in
securities and real estate.
The difficulty which swallowed up the Governor’s fortune, and that of
his wife, resulted from his endorsing notes for a friend. This friend
was Robert L. Walker, a capitalist banker and manufacturer, of
Youngstown. Mr. Walker was president of the Farmers’ National Bank of
Youngstown, the Girard Savings Bank, a stamping mill company, a stove
and range company, and was interested in several coal mines in Western
Ohio and Eastern Pennsylvania. He was one of the strongest men in the
community, was supposed to be worth more than $250,000, and enjoyed the
confidence of everybody who knew him.
When Major McKinley returned from the war and was ambitious to become a
lawyer, he found the struggle a hard one. His service as a soldier had
not enabled him to save anything of consequence, and when poverty
pressed him he turned to Mr. Walker for aid. He was not disappointed.
Mr. Walker proved a friend in need, and the Major was not the man to
forget a kindness. After he entered political life, he again had need of
financial assistance. In his first congressional campaign his expenses
were heavy, and it became necessary for him to raise $2,000 with which
to cancel a mortgage on his wife’s property. Mr. Walker loaned him the
money, and it is probable that at subsequent periods other loans were
made to the Major. He was constantly under heavy expense, owing to the
illness of his wife, and had no regular income save his salary of $5,000
as Congressman.
The first loan was repaid by Major McKinley out of his salary within two
years, and it is certain that all of his subsequent financial
obligations were promptly met up to the time of the crash.
Under such circumstances it was not strange that Major McKinley, having
become Governor, and having become possessed of some money of his own,
should be called upon to help out his old friend when he needed a little
accommodation. Mr. Walker applied to the Governor to indorse his paper
from time to time and the Governor willingly accommodated him, never
questioning the amount, nor the circumstances for which the money was
required.
These accommodations were spread over a considerable period of time, and
it is probable that in the course of his business Mr. Walker took up
many of the notes endorsed by the Governor. But his affairs became more
and more involved, and early in 1893 Mr. Walker informed the Governor
that he was in great need of money and asked the Governor to endorse his
notes, which he desired to have discounted. The Governor did not
hesitate an instant. The man who had befriended him needed aid, and so
far as the Governor could render it he did so. Governor McKinley
understood at the time that the notes signed by him aggregated about
$15,000. They were good at any bank in Ohio, and no trouble was
experienced by Mr. Walker in discounting them.
The Governor gave no further thought to the matter until February 17,
1893, when Youngstown, as well as the commercial circles of Ohio, were
startled by the announcement of the assignment of Robert L. Walker. A
judgment for $12,000 had been entered against the Youngstown Stamping
Company, and inability to meet it caused Mr. Walker to assign. As soon
as the fact became known Mr. Walker’s other enterprises began to topple,
and the next day all were swallowed up in the crash.
Governor McKinley was on his way to attend a banquet given by the Ohio
Society in New York when he was informed of the disaster which had
overtaken his friend. He cancelled his engagement in New York by
telegraph and immediately started for Youngstown. In the meantime those
interested had been figuring, and it was estimated that the liabilities
of Mr. Walker aggregated about $200,000. His available assets were
figured at about one-half that amount.
At Youngstown the Governor began to receive telegrams from banks all
over the state, announcing that they held some of his paper. He had been
led to believe that the notes had been discounted at only three banks,
and was at a loss to understand the situation, until it transpired that
instead of a liability of $15,000, his name was on paper amounting to
nearly $100,000! The Governor was under the impression that many of the
notes he had signed were executed for the purpose of taking up notes
previously given and which had fallen due. It was soon found that the
old notes had not been paid, and that the Governor’s obligations
amounted to far more than he was able to pay.
The Governor had not a particle of interest in any of Mr. Walker’s
properties, and all that he had done for that unfortunate gentleman was
done out of pure gratitude. After a conference with his Youngstown
friends, in which the true state of affairs was disclosed, the Governor
said:
“I can hardly believe this, but it appears to be true. I don’t know what
my liabilities are, but whatever I owe shall be paid dollar for dollar.”
At this time Mrs. McKinley owned property valued at $75,000, which had
been left her by her father. As there seemed no other way of meeting the
crisis, the Governor and his wife, on February 22, made an absolute
assignment of all their property to a board of trustees, to be used,
without preference, for the equal payment of the creditors. The trustees
were: H. H. Kohlsaat, Chicago; Myron T. Herrick, Cleveland; and Judge
Day, of Canton, Ohio. Friends urged Mrs. McKinley, at this time, to
retain an interest in her property, but she refused to do so,
transferring all her fortune to M. A. Hanna, of Cleveland.
This calamity weighed heavily upon the Governor, and he thought of
giving up public life and returning to the practice of his profession.
To friends with whom he talked, he said:
“I did what I could to help a friend who had befriended me. The result
is known. I had no interest in any of the enterprises Mr. Walker was
carrying. The amount of my endorsements is in excess of anything I
dreamed. There is but one thing for me to do—one thing I would do—meet
this unlooked for burden as best I can. I have this day placed all my
property in the hands of trustees, to be used to pay my debts. It will
be insufficient, but I will execute notes and pay them as fast as I can.
I shall retire from politics, take up the practice of law, and begin all
over again.”
It was at this time that the Governor’s friends throughout the country
began to bestir themselves for the purpose of aiding him financially.
The Chicago Inter-Ocean started a popular fund for the purpose, and
money began to roll in. Governor McKinley refused to accept a dollar of
this money, and it was by his direction returned to the donors, with his
thanks for their disinterested friendship. His friends were not to be
denied, however, and a number of them decided to subscribe privately to
a fund to take up the Walker notes. Among these gentlemen were M. A.
Hanna and Myron T. Herrick, Cleveland; P. D. Armour, Marshall Field and
H. H. Kohlsaat, Chicago; and Bellamy Storer and Thomas McDougall,
Cincinnati. The management of the fund was placed in the hands of Mr.
Kohlsaat, who afterwards said of the matter:
“One of the chief reasons why the subscription plan was adopted was
because a number of subscriptions were received anonymously and could
not be returned. There were over 4,000 subscriptions sent in, and when
the last piece of paper was taken up bearing Major McKinley’s name, no
more subscriptions were received, and some were returned. No list of the
subscribers was kept, and Governor McKinley does not know to this day,
with the possible exception of four or five names, who contributed the
money.
“When Governor McKinley saw the publication of the subscription scheme
he wrote me absolutely declining to receive a dollar. Mr. Hanna and his
other friends told him to leave the matter alone, for if his friends
wished to assist him they should have the privilege.”
The indebtedness having been satisfied in full, Mrs. McKinley’s property
was deeded back to her, and she and the Governor were left in the same
position financially they were before the crash occasioned by Mr.
Walker’s failure.
It was a graceful and fitting act for the people thus to have relieved
the Governor of the burden resting upon him. He had given practically
all his life to the public service, and was comparatively a poor man. If
he had given to his own interests the same fidelity which he devoted to
the interests of the public his financial reward would have been such
that he would have had no need of assistance in carrying such an
indebtedness. As it was, he did the only manly thing possible. He
acknowledged the debt, and made such preparations to pay it as were
within his power. He did not consider the hardship he must endure in
“beginning all over.” People had paid out their money on their faith in
his endorsement, and he did not intend they should lose a penny. It was
no stain on the Governor’s honor that he had endeavored to help a friend
and been financially ruined in the effort; and he was in no wise to be
criticised when he permitted his friends, for whose interests he had so
long labored, to bear the burden his generosity had put upon him.